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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (37354)	7/31/2005 7:04:22 AM
From: Crimson Ghost	Respond to of 110194

Mish: My scenario is worse for the masses than your deflation forecast. Deflation in asset prices. Higher CPI inflation when the dollar swandive resumes.

To: mishedlo who wrote (37354)	7/31/2005 12:03:40 PM
From: loantech	Read Replies (1) \| Respond to of 110194

1) Timing: We are fighting enormous amounts of money that intend to keep this house of cards holding up in hurricane based winds and a fire at the base. Perhaps the reasoning is if it gets high enough , they can easily fight any drawdown later. Now since I have no FN idea who "they" is , and since I think that conspiracy theories in general are asinine, then I must be an ass. No matter whether I am an ass or not, money is pouring into malinvestments over the past few years at least as fast as they did in 2000. Only this time it is worse. People are consuming their only assets in belief that housing prices are a one way ticket up. I am furious that a combination of forces has allowed this to happen (FED, Congress, FNM, banks). I am not sure "allowed" is the right word. Planned debt slavery might be a better word.>>>>>> Mish are you relating what Russ ignores (oil usage) to housing here? I agree we will have a housing crash. How big I have no idea. My timing on this is always wrong. Always. You have no idea how foolish all of this is until you sit at my mortgage desk for a couple of months. <ng> <98% of the people see inflation. 2% of us see deflation.> If so then you will be right as the majority is usually if not always wrong. tom

To: mishedlo who wrote (37354)	7/31/2005 12:53:41 PM
From: russwinter	Read Replies (3) \| Respond to of 110194

98% of the people see inflation. 2% of us see deflation.> Beg to differ again, 98% see Bubbles they can borrow and speculate on, all the while just poo-pooing the resulting serious inflation as "no big deal". That's because as you somewhat correctly say, they have a vested in interest in Bubbles (more so than inflation). That's Fillmore's (and my) Bubble Mr. Creosote enabling theory. This works by waiting for more weak economic numbers, then smiling gleefully, waiting (usually not too long) for more money printing (the Helicoptor Ben bogus monetarist approach), borrow, and speculate even more. Then you end up with a ludicrious situation where so much capital has been misallocated, that you have 1-2% cap rates on rentals, that's if they are lucky enough t ofind a renter. That's a completely different psychology from what you typically describe. My rather repetitive term for it: the Land of Oz. I really feel this constant focus on deflation, and the simplistic K wave theories that go with it clouds and fogs the real issue. If you would substitute the word Bust (a different and more accurate term) for deflation, we would be on the same page, and then we can track it, see the response to it, and how the chips fall.

To: mishedlo who wrote (37354)	8/2/2005 12:32:52 AM
From: Jim McMannis	Read Replies (2) \| Respond to of 110194

RE:"I am furious that a combination of forces has allowed this to happen (FED, Congress, FNM, banks). I am not sure "allowed" is the right word. Planned debt slavery might be a better word." I figure there is a certain % of people gnashing their teeth and holding their breath but there is a greater % of people who are happy about their home price and new found ATM...they in fact don't really know what's going on to drive up prices. The same people believe its all real and prices won't go down. Then there are a smaller number of people participating even more in the flipping, RE industry and mortgage industry. I'm not sure why all this is being allowed other than to makes the majority of people feel warm and fuzzy and Congress all owns second homes that they potentially cash in on later.